2020-00040: Use of Derivatives by Registered Investment Companies and Business Development Companies; Required Due Diligence by Broker-Dealers and Registered Investment Advisers Regarding Retail Customers' Transactions in Certain Leveraged/Inverse Investment Vehicles
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The Securities and Exchange Commission (the "Commission") is re-proposing rule 18f-4, a new exemptive rule under the Investment Company Act of 1940 (the "Investment Company Act") designed to address the investor protection purposes and concerns underlying section 18 of the Act and to provide an updated and more comprehensive approach to the regulation of funds' use of derivatives and the other transactions addressed in the proposed rule. The Commission is also proposing new rule 15l-2 under the Securities Exchange Act of 1934 (the "Exchange Act") and new rule 211(h)-1 under the Investment Advisers Act of 1940 ("Advisers Act") (collectively, the "sales practices rules"). In addition, the Commission is proposing new reporting requirements and amendments to Form N-PORT, Form N-LIQUID (which we propose to be re-titled as "Form N-RN"), and Form N-CEN, which are designed to enhance the Commission's ability to effectively oversee funds' use of and compliance with the proposed rules, and for the Commission and the public to have greater insight into the impact that funds' use of derivatives would have on their portfolios. Finally, the Commission is proposing to amend rule 6c-11 under the Investment Company Act to allow certain leveraged/inverse ETFs that satisfy the rule's conditions to operate without the expense and delay of obtaining an exemptive order.
The agency’s own summary, as published.
What this changes
Amends 6 parts of the Code of Federal Regulations — the standing rules this notice rewrites.
- 17 CFR 239 Forms Prescribed Under the Securities Act of 1933
- 17 CFR 240 General Rules and Regulations, Securities Exchange Act of 1934
- 17 CFR 249 Forms, Securities Exchange Act of 1934
- 17 CFR 270 Rules and Regulations, Investment Company Act of 1940
- 17 CFR 274 Forms Prescribed Under the Investment Company Act of 1940
- 17 CFR 275 Rules and Regulations, Investment Advisers Act of 1940
Rulemaking docket
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